1. What are the key success factors for Morrison? 2. What must purchasing do wel

Question

1. What are the key success factors for Morrison?

2. What must purchasing do well to contribute here?

Lisa Caruso Lisa Caruso, purchasing manage very concerned about the company's stockroom opera Thursday ions. Faulty records, a rash of last-minute rush orders, was occasionally scheduled on and interference with production were troubles that s had become aware of since becoming manager nine r at Morrison, Inc., was including an unpaid 30-minute lunch break) Monday to , and two eight-hour shifts on Friday. Overtime Most loaders were manufactured to customer order with six to eight weeks' lead time. About 60 percent of the months earlier. It was Thursday, November 6, and with loaders and accessories (e.g. .buckets and forks) were sold volumes expecting to increase during the coming months, through distributors in the northeastern United States and Lisa wanted to make a proposal to the president during their meeting the following week Canada. Normally, distributors and customers did some final assembly themselves. MORRISON, INC. MANUFACTURING OPERATIONS Morrison Inc., (Morrison) located near Philadelphia, The major departments in the plant included the machine Pensylvania, manufactured loaders and accessories for shop, fabrication and welding, assembly, and painting. the construction industry. Current sales were approxi The plant also had a maintenance and repair department mately $50 million. The owner-president of Morrison, which included a repair parts storage room David Morrison, was the son of the founder of the busi The company employed 140 nonunion hourly workers s. The company enjoyed an excellent reputation for a and 30 staff across six departments: engineering, manu ell engineered, high-quality, sturdy product line. Morrison facturing, human resources, accounting and finance, ontruction equipment was considered a premium brand sales, and purchasing. Managers in each department re- in the industry, which differentiated itself from the large ported directly to the president, but enjoyed a high degree of autonomy acturers on the basis of quality and reliability. dMorrisn believed in keeping overhead costs and all aspects of the business as simple as possible. prior, purchased from a local software provider. Purchas- ere highly seasonal and cyclical, closely tied to the ing modules in the system included inventory control The company installed an ERP system several years of td nstruction industry. The peak manufactur purchase orders, shipping and receiving, requisitions, and forecasting. planning, and scheduling. The information systems team reported to the CFO period rar d September. During me, the company operated two 10-hour shifts (not

Explanation / Answer

1. Main success factor of Morrison are well-engineered, high quality, sturdy product line. Their construction equipments were of premium brand which is their competitive advantage over large manufacturer. Their products are more reliable and of high quality. Other success factor is keeping things simple and low overhead cost.

2. Main problem purchasing department is facing due to last minute rush orders and due to that they have to buy higher priced products which resulted in extra cost of $ 10,000 per month. Things are becoming quite complex. For the requirements they depend on workers, workers tell them daily demand for next day which is creating problems for clerk. Demand is not being met. Demand forecasting is not being done properly and relying on workers for part requirement for the following day at the end of their shift. Lisa should discuss with all her team and she has to make a demand forecasting plan. Which will calculate the approximate demand of products and help them to minimise the cost. There are many ways to do demand forecasting like using previous year data and some help can be taken from workers too. If proper planning is done in demand forecasting it will solve all the problems they are facing. It will increase their profits and distribute work load.

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